Highlands & Lowlands (HLB)

Wednesday 25 May, 2005

Highlands & Lowlands

Interim Results

Highlands & Lowlands Berhad
25 May 2005
HIGHLANDS & LOWLANDS BERHAD
(Company No : 24817H)
(Incorporated in Malaysia)
INTERIM REPORT ON CONSOLIDATED RESULTS FOR THE FIRST QUARTER ENDED 31 MARCH 2005
I. Unaudited Condensed Consolidated Income Statements
First Quarter Cumulative Quarter
Current Preceding Current Preceding
Year Year Year Year
Note 1.3.2005 31.3.2004 31.3.2005 31.3.2004
RM'000 RM'000 RM'000 RM'000
Revenue 8 93,221 90,068 93,221 90,068
=========== =========== =========== ===========
Profit from operations 8 18,689 26,848 18,689 26,848
Investment income 109 83 109 83
Finance income 9,026 9,380 9,026 9,380
2,737 1,538 2,737 1,538
Share of results of associated ----------- ----------- ----------- -----------
companies
Profit before tax 30,561 37,849 30,561 37,849
Income tax 18 (9,279) (9,806) (9,279) (9,806)
----------- ----------- ----------- -----------
Profit after tax attributable to
shareholders 21,282 28,043 21,282 28,043
=========== =========== =========== ===========
Earnings per share (sen)
- Basic 25 3.5 4.6 3.5 4.6
=========== =========== =========== ===========
The Condensed Consolidated Income Statements should be read in conjunction with
the audited Financial Statements for the year ended 31 December 2004 and the
accompanying explanatory notes attached to the interim financial statements.
II. Condensed Consolidated Balance Sheets
Unaudited Audited
As at As at
31.3.2005 31.12.2004
Note RM'000 RM'000
Property, plant and equipment 9 1,463,393 1,470,521
Land held for development 20,478 20,478
Investment in associated companies 148,991 163,359
Loan to an associated company 185,000 185,000
Other investments 1,332 1,332
Trade receivables 23,067 23,067
----------- -----------
1,842,261 1,863,757
----------- -----------
Current assets
Inventories 18,231 11,883
Trade and other receivables 90,254 107,673
Income tax recoverable 1,516
364
Amount due from holding company 521,561 514,036
Investment stocks 5,003 6,081
Marketable securities 20,840 21,084
Deposits, bank and cash balances 300,478 250,490
----------- -----------
957,883 911,611
----------- -----------
Current Liabilities
Trade and other payables 32,144 26,823
Amount due to holding company 28,046 26,112
Deferred income 1,304 1,739
Taxation 7,117 9,428
----------- -----------
68,611 64,102
----------- -----------
Net Current Assets 889,272 847,509
----------- -----------
2,731,533 2,711,266
=========== ===========
Capital and Reserves
Share capital 302,168 302,168
Reserves 2,297,042 2,275,760
----------- -----------
Shareholders' funds 2,599,210 2,577,928
----------- -----------
Long-term and Deferred Liabilities
Deferred income 2,561 2,561
Retirement benefits 3,252 3,157
Deferred tax liabilities 126,510 127,620
----------- -----------
132,323 133,338
----------- -----------
2,731,533 2,711,266
=========== ===========
Net Tangible Assets per Share (RM) 4.30 4.27
=========== ===========
The Condensed Consolidated Balance Sheets should be read in conjunction with the
audited Financial Statements for the year ended 31 December 2004 and the
accompanying explanatory notes attached to the interim financial statements.
III. Condensed Consolidated Statement of Changes in Equity for the First Quarter ended 31 March 2005
---------Non-distributable------- Distributable
Share Share Revaluation Capital Retained
capital premium reserve reserve profits Total
RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
3 Months Ended
31 March 2005
At 1 January 2005 302,168 4,371 540,875 35,553 1,694,961 2,577,928
Transfer from revaluation to
revenue reserve - - (2,485) - 2,485 -
-------------------------------------------------------------------------------
302,168 4,371 538,390 35,553 1,697,446 2,577,928
Profit for the period - - - - 21,282 21,282
-------------------------------------------------------------------------------
At 31 March 2005 302,168 4,371 538,390 35,553 1,718,728 2,599,210
===============================================================================
3 Months Ended
31 March 2004
At 1 January 2004 302,168 4,371 558,472 35,553 1,631,270 2,531,834
Transfer from revaluation to
revenue reserve - - (2,364) - 2,375 11
-------------------------------------------------------------------------------
302,168 4,371 556,108 35,553 1,633,645 2,531,845
Profit for the period - - - - 28,043 28,043
-------------------------------------------------------------------------------
At 31 March 2004 302,168 4,371 556,108 35,553 1,661,688 2,559,888
===============================================================================
The Condensed Consolidated Statement of Changes in Equity should be read in
conjunction with the audited Financial Statements for the year ended
31 December 2004 and the accompanying explanatory notes attached to the interim
financial statements.
IV. Condensed Consolidated Cash Flow Statements
3 Months Ended
31.3.2005 31.3.2004
RM'000 RM'000
Operating activities
Cash from operations 48,402 116,015
Interest received 7,490 7,888
Tax paid (12,572) (12,518)
----------- -----------
Net cash inflow from operating activities 43,320 111,385
----------- -----------
Investing activities
Property, plant and equipment
- purchases (3,622) (6,228)
Other investments
- purchases (1,100) (7,137)
- disposals 1,047 1,414
Dividends received 15,934 61
Net change in amount due from holding company (5,591) 5,923
Net change in amount due from an associated company - 13,471
----------- -----------
Net cash inflow from investing activities 6,668 7,504
----------- -----------
Net increase in cash and cash equivalents 49,988 118,889
Cash and cash equivalents at 1 January 250,490 88,356
----------- -----------
Cash and cash equivalents at 31 March 300,478 207,245
=========== ===========
The Condensed Consolidated Cash Flow Statements should be read in conjunction
with the audited Financial Statements for the year ended 31 December 2004 and
the accompanying explanatory notes attached to the interim financial statements.
Part A - Explanatory Notes Pursuant to MASB 26
1. Basis of Preparation
The interim financial statements are unaudited and have been prepared in
accordance with the requirements of MASB 26, Interim Financial Reporting'
and paragraph 9.22 of the Listing Requirements of Bursa Malaysia Securities
Berhad.
The accounting policies, methods of computation and presentation adopted by
the Group for the interim financial statements are consistent with those
adopted in the annual financial statements for the year ended 31 December
2004.
The interim financial statements should be read in conjunction with the
audited financial statements for the year ended 31 December 2004. These
explanatory notes attached to the interim financial statements provide an
explanation of events and transactions that are significant to an
understanding of the changes in the financial position and performance of
the Group since the financial year ended 31 December 2004.
2. Auditors' Report on Preceding Annual Financial Statements
The auditors' report on the financial statements for the year ended
31 December 2004 was not qualified.
3. Comments about Seasonal or Cyclical Factors
The plantation operation of the Group is affected by seasonal production of
fresh fruit bunches.
4. Material Items that affect the Financial Statements
There were no material items affecting the financial statements during the
financial period ended 31 March 2005.
5. Changes in Accounting Estimates
There were no changes in estimates of amounts reported in prior interim
periods of the current financial year or in prior financial years that have
a material effect on the current quarter.
6. Debt and Equity Securities
There were no issuance and repayment of debt and equity securities, share
buy-backs, share cancellations or shares held as treasury shares and resale
of treasury shares for the financial period ended 31 March 2005.
7. Dividends Paid
No dividends were paid during the financial period ended 31 March 2005.
8. Segmental Information
Segment information is presented in respect of the Group's business
segment.
First Quarter Cumulative Quarter
Current Preceding Current Preceding
Year Year Year Year
31.3.005 31.3.2004 31.3.2005 31.3.2004
RM'000 RM'000 RM'000 RM'000
Revenue
Plantation and agricultural services 93,200 89,902 93,200 89,902
Investment dealing 21 166 21 166
----------- ----------- ----------- -----------
93,221 90,068 93,221 90,068
=========== =========== =========== ===========
Profit From Operations
Plantation and agricultural services 19,015 23,589 19,015 23,589
Compulsory land acquisitions 268 1,945 268 1,945
Investment dealing (594) 1,314 (594) 1,314
----------- ----------- ----------- -----------
18,689 26,848 18,689 26,848
=========== =========== =========== ===========
9. Carrying Amount of Revalued Assets
The valuations of property, plant and equipment have been brought forward
without amendment from the financial statements for the year ended
31 December 2004.
10. Subsequent Events
There were no material events subsequent to the current quarter.
11. Changes in Composition of the Group
There were no changes in the composition of the Group during the financial
period ended 31 March 2005.
12. Changes in Contingent Liabilities and Contingent Assets
There were no changes in contingent liabilities or contingent assets since
the last annual balance sheet date as at 31 December 2004.
13. Capital Commitments
The amount of commitments for the purchase of property, plant and equipment
not provided for in the financial statements as at 31 March 2005 are as
follows:
RM'000
Authorised but not contracted for 20,662
Contracted but not provided for 9,102
-----------
29,764
===========
Part B - Explanatory Notes Pursuant to Appendix 9B of the Listing Requirements
of Bursa Malaysia Securities Berhad.
14. Performance Review
For the three months ended 31 March 2005, the Group recorded a profit
before tax of RM30.6 million, a decrease of RM7.2 million as compared with
that for 2004 of RM37.8 million.
The lower profit of the Group for the period under review was attributable
largely to lower prices realised for palm oil despite the higher production
of fresh fruit bunches. The average price realised for palm oil was RM1,332
per tonne as compared to RM1,748 per tonne for the corresponding period of
2004. Production of fresh fruit bunches for the period of 217,590 tonnes
was higher by 56,087 tonnes (34.7%) as compared to 161,503 tonnes for the
corresponding period of 2004.
15. Comments on Material Changes in Profit Before Taxation for the Current
Quarter as Compared with the Immediate Preceding Quarter
The Group's profit before tax for the current quarter ended 31 March 2005
at RM30.6 million was lower than that recorded for the preceding quarter
ended 31 December 2004 of RM262.3 million, by RM231.7 million.
The lower profit registered by the Group for the current quarter was
attributable largely to :
i) Gain on sale of land of RM116.3 million and gain from compulsory land
acquisitions of RM72.8 million, totaling RM189.1 million in the
preceding quarter; and
ii) Lower contribution from associated companies by RM36.7 million due to
higher billings by Guthrie Property Development Holding Berhad in the
preceding quarter.
16. Current Year Prospects
The Group's performance for the year 2005 is expected to be lower in view
of the lower crude palm oil prices despite higher production of fresh fruit
bunches.
17. Profit Forecast or Profit Guarantee
The disclosure requirements for explanatory notes for the variance of
actual profit after tax and minority interest and shortfall in profit
guarantee are not applicable.
18. Income Tax
Tax expense comprises the following :-
First Quarter Cumulative Quarter
Current Preceding Current Preceding
Year Year Year Year
31.3.2005 31.3.2004 31.3.2005 31.3.2004
RM'000 RM'000 RM'000 RM'000
Group:
Current taxation 9,133 7,514 9,133 7,514
Deferred tax liabilities (1,110) 1,690 (1,110) 1,690
Underprovision in
respect of prior years - 27 - 27
----------- ----------- ----------- -----------
8,023 9,231 8,023 9,231
----------- ----------- ----------- -----------
Associates:
Current taxation 1,252 706 1,252 706
Deferred tax liabilities 20 (107) 20 (107)
Overprovision in
respect of prior years (16) (24) (16) (24)
----------- ----------- ----------- -----------
1,256 575 1,256 575
----------- ----------- ----------- -----------
9,279 9,806 9,279 9,806
=========== =========== =========== ===========
The effective tax rate of the Group is higher than the statutory tax rate
due to certain expenses not allowable for income tax purposes.
19. Sale of Unquoted Investments and Properties
There was no sale of unquoted investments outside the ordinary course of
the Group's business for the period ended 31 March 2005.
20. Quoted Securities
a) Total purchases and sales of quoted securities are as follows :-
First Quarter Cumulative Quarter
Current Preceding Current Preceding
Year Year Year Year
31.3.2005 31.3.2004 31.3.2005 31.3.2004
RM'000 RM'000 RM'000 RM'000
Purchase consideration 1,100 1,819 1,100 1,819
Disposals 1,047 274 1,047 274
Gain on disposals 148 110 148 110
----------- ----------- ----------- -----------
b) Investments in quoted securities as at 31 March 2005 are as follows :-
Cost Book Value Market Value
RM'000 RM'000 RM'000
Total quoted securities 19,827 12,230 13,443
=========== =========== ===========
21. Status of Corporate Proposals Announced
There was no corporate proposal announced but not completed as at the date
of this announcement.
22. Borrowings and Debt Securities
There were no Group borrowings and debt securities as at 31 March 2005.
23. Off Balance Sheet Financial Instruments
As at the date of this announcement, the Group does not have any financial
instruments with off balance sheet risk.
24. Changes in Material Litigation
As at the date of this announcement, the Group is not engaged in any
material litigation.
Earnings Per Share
25.
a) Basic
Basic earnings per share is calculated by dividing the net profit for
the period by the weighted average number of ordinary shares in issue
during the period.
Current Cumulative
Quarter Quarter
31.3.2005 31.3.2005
Profit attributable to shareholders (RM'000) 21,282 21,282
Weighted average number of ordinary shares
in issue ('000) 604,336 604,336
Basic earnings per share (sen) 3.5 3.5
=========== ===========
b) Diluted
Not applicable.
26. Authorisation for Issue
The interim financial statements were authorised for issue by the Board of
Directors in accordance with a resolution of the Directors on 25 May 2005.
By Order of the Board
25 May 2005 Moriami Mohd
Kuala Lumpur Secretary
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